11 February 2011

Plan for your family's future and types of insurance to consider

Plan for your family's future and types of insurance to consider ; You've probably given a great deal of thought to your family's future. Where will your children go to college? Where will they end up living? There are so many unknowns when it comes to the future and raising a family. Preparation is your best defense against the stress and worries that accompany thoughts of the unknown.

How do you prepare? Life insurance is the best way to see that your family's future will remain stable should something happen to you. Life insurance is all about protecting the future - not your own, but that of your family.
Protect your finances
Life insurance can be used in several different ways. The most vital role of life insurance, however, is to financially protect your family should the unthinkable occur.

Depending on how much you purchase, life insurance can be used to cover day-to-day expenses, mortgage payments, health insurance, car insurance, taxes, any debt that you hold, costs associated with running the household in your absence, college expenses, your funeral and burial expenses, and other financial obligations that you hold. When you're not sure how to go about purchasing life insurance, use easy online calculators such as the one at SBLI.com, which can help determine the appropriate amount.

Keep your home
Purchasing a home is a substantial investment. If something happens to you, could your family continue to make the mortgage payments and maintain the lifestyle you've always envisioned for them? If you choose a life-insurance policy that lasts through the duration of your mortgage, the pay-out could go toward mortgage payments, saving your family from the risk of foreclosure. Your children would be able to remain in the house they consider home, lessening their emotional distress.

It's a good idea to lock in rates while your children are young. Rates only get higher as you age, and the same is true for your children. That is why buying a whole life-insurance policy while your children are young is so important. It locks in a low premium rate from their childhood onward.

Now that you've decided to protect your family by purchasing life insurance, you may not be sure what works best for you - and them. Here are two types of insurance to consider:

1. Guaranteed Level Premium Term Life Insurance: Level Premium Term life policies provide a guarantee the premium will be level for a specified length of time, usually 10, 15, 20, 25 or 30 years. Premiums are guaranteed to never increase over the period that you select.

2. Whole life insurance: Unlike term insurance, whole life continues indefinitely as long as the premiums are paid. In addition to providing a death benefit, the policy builds up a cash value that is generally tax deferred. Whole life policies are typically more expensive than term policies.

It's important to keep in mind that you don't buy life insurance for your own benefit but that of your family. Life insurance will give you and your family peace of mind. Invest in a policy that protects your future so you can focus on the present.

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